Many people assume that they cannot get a mortgage loan if they have bad credit or recently filed for bankruptcy. While lending standards are not what they used to be, it is still very possible to get a mortgage loan with less than perfect credit. The trick is representing yourself in the best light possible, which requires a few simple steps on your part.
Shining The Best Light
Anytime you are looking to secure a loan it is important to put your best foot forward. This become especially true if your credit is tarnished in one way or another. Before you start loan shopping, it is important to develop a plan of action.
The most important aspect of securing a decent mortgage loan is improving your credit. You never want to apply for a loan without first reviewing your credit situation. There could be inaccurate information reported on your credit report that may hinder you ability to secure a loan. Whether your credit has been damaged for a while, or you recently completed a bankruptcy, check your credit report for accuracies. Dispute any false information and have it removed before proceeding.
If your credit report is accurate, yet dim, start making strides to improve your credit for 6 months to a year before you apply for a mortgage loan. The best tool you have is proving yourself to be a responsible borrower. Although you may have to wait to secure that mortgage loan, it will be worth it in the end when your obtain a loan with better terms. Try to reduce your debts as much as possible before applying for a loan. A good rule of thumb is that your debt should not exceed 30 percent of your maximum spending limit on that account. The lower your debt-to-limit ratio, the higher your credit score and better loan terms you will be eligible to obtain.